WEBVTT - Tech Selloff Deepens: Nasdaq 100 Faces Worst Drop Since 2022 0:00:01.240 --> 0:00:02.120 We're from Mahard. 0:00:02.279 --> 0:00:06.680 We're Innovation Money and Power Collie in Silicon Vallet NBN. 0:00:07.040 --> 0:00:10.400 This is Bloomberg Technology with Caroline Hyde and. 0:00:10.480 --> 0:00:28.200 Ed Ludlow live from San Francisco. This is Bloomberg Technology 0:00:28.200 --> 0:00:31.800 coming up. A global equity route intensifies with big tech 0:00:32.040 --> 0:00:35.800 at the forefront of the selloff, from Nvidio and TSMC to. 0:00:35.840 --> 0:00:37.000 Robinhood and Microsoft. 0:00:37.000 --> 0:00:39.720 We hone in on the names being hit hardest amid 0:00:39.720 --> 0:00:42.760 the carnage, and we'll have full coverage on Apple as 0:00:42.800 --> 0:00:47.240 Berkshire halfaway slashes its steak in the tech giant. But first, 0:00:47.280 --> 0:00:50.720 this is the picture in financial markets. It is an 0:00:50.840 --> 0:00:53.840 ugly day, but we're off session lows at the index level. 0:00:53.880 --> 0:00:56.720 It started in Asia, it went to the European session. 0:00:56.800 --> 0:00:59.360 Now in the United States, but looking at the S 0:00:59.360 --> 0:01:02.160 and P five five hundred, even a three percent decline 0:01:02.360 --> 0:01:05.120 puts US on track for its biggest drop since late September. 0:01:05.400 --> 0:01:08.960 Chip stocks particularly feeling the anxiety names like in Nvidia, 0:01:09.000 --> 0:01:12.720 but also TSMC's usadrs. You saw the yield on the 0:01:12.800 --> 0:01:15.840 US two year treasury fall below that of the ten year. 0:01:15.959 --> 0:01:19.560 Disinversion happen for the first time since July twenty twenty two. 0:01:19.840 --> 0:01:22.959 The crypto markets are also interesting. Show me Bitcoin and 0:01:23.000 --> 0:01:24.480 look at the severity of declines. 0:01:24.680 --> 0:01:25.759 Remember that in the. 0:01:25.680 --> 0:01:28.679 Crypto space, we're in an asset class that is trading 0:01:28.920 --> 0:01:31.000 twenty four to seven If we can please bring that up, 0:01:31.000 --> 0:01:33.600 because I want to move things forward. There's also particular 0:01:33.640 --> 0:01:36.880 anxiety right in those single names. You look at Bitcoin 0:01:37.120 --> 0:01:39.800 down eight point eight percent in a session twenty four 0:01:39.800 --> 0:01:40.759 to seven hour trading. 0:01:41.040 --> 0:01:42.240 Apple and and Vidia. 0:01:42.600 --> 0:01:46.039 Also off session lows, but in particular names that leading 0:01:46.040 --> 0:01:49.480 declines from a point perspective or a percentage change drag 0:01:49.760 --> 0:01:50.560 at the index level. 0:01:50.640 --> 0:01:51.400 Let's break it all down. 0:01:51.440 --> 0:01:54.360 We got Bloomberg crossset report at Isabel Lee and also 0:01:54.440 --> 0:01:58.000 our international Economics and Policy correspondent Michael McKee as well. 0:01:58.040 --> 0:02:00.440 I start with you. I think this started with economic 0:02:00.560 --> 0:02:01.480 data on Friday. 0:02:01.880 --> 0:02:03.920 Then you had new slow through the weekend, and now 0:02:03.960 --> 0:02:06.160 here we are through an Asia, Europe and the US 0:02:06.200 --> 0:02:07.760 session where things don't look very good. 0:02:08.160 --> 0:02:10.679 Exactly. It's sart. On a Friday, we had week jobs data, 0:02:10.720 --> 0:02:13.400 but it wasn't really horrible, so we saw a stock 0:02:13.480 --> 0:02:15.919 market under pressure. But over the weekend I was checking 0:02:15.919 --> 0:02:17.720 my phone because I was trying to figure out what 0:02:17.880 --> 0:02:19.639 is going wrong. And today we have New York to 0:02:19.680 --> 0:02:22.240 London to Tokyo equities are really getting pummeled s and 0:02:22.280 --> 0:02:24.600 P five hundred is on track for its worst routes 0:02:24.639 --> 0:02:26.920 in twenty twenty two, with ninety five percent of the 0:02:26.960 --> 0:02:29.560 stocks there in the red. And I read a note 0:02:29.560 --> 0:02:32.080 this morning that's saying, instead of asking what's going wrong, 0:02:32.240 --> 0:02:34.360 it's better to ask what didn't. We have a slew 0:02:34.400 --> 0:02:36.720 of reasons for that. We have, for instance, a great 0:02:36.800 --> 0:02:39.320 hip from Japan, a perceived failure by the said to 0:02:39.360 --> 0:02:42.440 cut rates. We have unemployment US employment figures. We have 0:02:42.520 --> 0:02:45.040 Warren Buffett selling Apple shares, and we had a Bloomberg 0:02:45.080 --> 0:02:48.240 storytelling traders Okay, maybe it's really not some cost for 0:02:48.240 --> 0:02:50.680 a panic, but of course we have some traders panicking. 0:02:50.760 --> 0:02:52.960 And last, but not the least, is the unwiding and 0:02:53.000 --> 0:02:56.120 the highly popular trade which is called popular yen, called 0:02:56.320 --> 0:02:58.760 carry trade. We're also seeing pressure in that. So that's 0:02:58.800 --> 0:03:01.200 a trade where you borrow yen investment in their high 0:03:01.200 --> 0:03:03.960 flying currencies. But really it's just really a slew of reasons, 0:03:03.960 --> 0:03:05.000 and I don't know where to start. 0:03:06.160 --> 0:03:10.320 Mike McKee, our policy and economics corresponding the Fed, or 0:03:10.360 --> 0:03:13.280 at least the market's expectations for the FED, are a 0:03:13.320 --> 0:03:15.799 big part of this story. The swaps market at one 0:03:15.880 --> 0:03:20.200 point pricing in a sixty percent six zero percent chance 0:03:20.240 --> 0:03:22.760 of an emergency rate cut this week. 0:03:22.919 --> 0:03:23.760 Explain that to me. 0:03:24.760 --> 0:03:27.640 I can't really explain it to you except for panic. 0:03:28.240 --> 0:03:31.280 It was in Asian markets where the volume is lower 0:03:31.320 --> 0:03:35.360 and people don't understand the FED. Perhaps as well. It's 0:03:35.520 --> 0:03:38.360 really come back now at the moment there's one week 0:03:38.400 --> 0:03:41.760 swaps are pricing in a five basis point move, not 0:03:41.880 --> 0:03:46.200 even a real rate cut. So at this point you 0:03:46.240 --> 0:03:48.720 can't really say that people think the FED is going 0:03:48.760 --> 0:03:51.040 to be getting involved. There's more of a wish being 0:03:51.040 --> 0:03:55.119 the father to the man situation here in the markets, 0:03:55.240 --> 0:03:58.000 always looking to the FED when something goes wrong. 0:03:58.880 --> 0:04:01.320 But there's some right with. 0:04:01.400 --> 0:04:04.800 What's happened today from an economic standpoint, in the sense 0:04:04.840 --> 0:04:09.480 that the ISM services number was good, and with yields falling, 0:04:09.600 --> 0:04:14.440 we're seeing mortgage rates falling. We're also seeing gasoline prices falling, 0:04:14.560 --> 0:04:17.000 and all those things could be stimulative to the economy. 0:04:17.040 --> 0:04:19.600 So the Fed's could to sit back and say you're 0:04:19.600 --> 0:04:22.479 losing money in your equity trade, because maybe you did 0:04:22.520 --> 0:04:25.640 the wrong trade, but it's not something we can fix. 0:04:27.000 --> 0:04:27.440 Is value. 0:04:27.480 --> 0:04:29.880 You sort of masterfully gave this global picture of what 0:04:29.960 --> 0:04:33.240 happened in equities markets, tying in the economic data. One 0:04:33.240 --> 0:04:35.040 of the questions I've been getting this morning on social 0:04:35.080 --> 0:04:36.359 media has been about Bitcoin. 0:04:36.640 --> 0:04:37.719 Loads of people saying, hold on. 0:04:37.800 --> 0:04:40.280 You kept telling us that bitcoin would behave like a 0:04:40.320 --> 0:04:44.520 haven asset in an environment like this. Bitcoin seems very 0:04:44.640 --> 0:04:48.000 much tied to the FED narrative and economic data as well, 0:04:48.040 --> 0:04:48.720 But that's the same. 0:04:48.760 --> 0:04:50.960 Bitcoin hasn't been really a haven. In fact, it's been 0:04:50.960 --> 0:04:53.360 more of a barometer of risk sentiment. And now we 0:04:53.400 --> 0:04:56.760 see Bitcoin and Easier and all the other art coins 0:04:56.800 --> 0:04:59.479 really edging lower in from me, what's interesting is the 0:04:59.520 --> 0:05:02.400 Bitcoin ETFs and the ether ETF because we've never really 0:05:02.440 --> 0:05:05.800 seen this economic climate with this product. I mean, a 0:05:05.839 --> 0:05:07.920 lot of people are comparing it to the Great Financial 0:05:07.960 --> 0:05:10.960 Crisis or other eras, but then we didn't have bitcoin 0:05:11.000 --> 0:05:13.200 ETFs then, so we're really going to keep track of 0:05:13.279 --> 0:05:15.720 the flows. I have a story from Across Asset team 0:05:15.760 --> 0:05:18.560 about how billions were still poured into tech ETFs, and 0:05:18.600 --> 0:05:20.839 of course now we see that they're under some pain, 0:05:21.000 --> 0:05:22.640 so it's also going to be interesting to see how 0:05:22.680 --> 0:05:27.320 bitcoin ets and ether ETFs trade in this really unfortunate 0:05:27.400 --> 0:05:28.640 or fortunate depending on who you ask. 0:05:28.640 --> 0:05:30.560 Pena'men on Mike. 0:05:30.640 --> 0:05:33.400 We always say on this program Bloomberg Technology that higher 0:05:33.480 --> 0:05:36.159 rates discount the present values of future cash flows. So, 0:05:36.200 --> 0:05:39.159 in other words, technology investors track what the FED will 0:05:39.160 --> 0:05:42.480 it won't do. I was listening to Bloomberg Surveillance earlier, 0:05:42.520 --> 0:05:47.839 and they're talking about this distinction between the fed's lesser 0:05:47.880 --> 0:05:52.160 focus on restrictive policy and a future moved to accommodative policy. 0:05:52.839 --> 0:05:55.440 What happens next. I know that's really impossible for you 0:05:55.480 --> 0:05:56.400 to answer, but go ahead. 0:05:57.360 --> 0:05:59.680 Yeah, that is a sort of impossible set up there, 0:05:59.720 --> 0:06:01.520 because the FED is going to want to wait as 0:06:01.520 --> 0:06:04.160 long as possible. They don't want to do anything emergency. 0:06:04.200 --> 0:06:06.720 They don't want to react to stock market ups and downs. 0:06:06.920 --> 0:06:08.920 As long as you can trade, they don't care which 0:06:08.960 --> 0:06:12.839 way the trade goes. But the data have to show 0:06:12.880 --> 0:06:17.159 the Fed that there is a significant shift in the 0:06:17.200 --> 0:06:20.400 economic outlook before they would consider doing something like a 0:06:20.440 --> 0:06:25.080 fifty basis point cutter moving much more closer to accommodative. 0:06:25.640 --> 0:06:29.160 They're still on track for twenty five in September because 0:06:29.200 --> 0:06:31.360 they think they need to normalize, they need. 0:06:31.240 --> 0:06:34.040 To get back to a closer to neutral rate. 0:06:34.520 --> 0:06:36.760 And I don't think that's going to change, at least 0:06:36.800 --> 0:06:39.719 in their minds unless we see some data start to 0:06:39.720 --> 0:06:42.120 come in really badly. And the first data we had 0:06:42.160 --> 0:06:45.760 out today, the ISM services numbers come in better than 0:06:45.800 --> 0:06:49.599 expected across the board, So their caution is going to 0:06:49.640 --> 0:06:53.039 be dependent on the data, and the data at this 0:06:53.200 --> 0:06:55.160 point are not telling them they need to do anything. 0:06:56.480 --> 0:06:58.960 Bloom Bags, Mike McKee and Isabel Lee, the best at 0:06:58.960 --> 0:07:01.440 bloom Bags Television, New York, thank you so much. Let's 0:07:01.480 --> 0:07:04.240 get more on the markets and bring in Angelocal cafas 0:07:04.279 --> 0:07:07.960 senior strategists at Edward Jones. And I'm always one for 0:07:08.000 --> 0:07:11.040 a data point. I'm thinking specifically about the Mag seven 0:07:11.440 --> 0:07:13.440 and we have this index or gauge at the Mag 0:07:13.480 --> 0:07:16.640 seven at one point in the session, it's biggest. 0:07:16.320 --> 0:07:19.400 Drop on record. Take everything that our. 0:07:19.320 --> 0:07:22.160 Team have just just said and apply it to what's 0:07:22.200 --> 0:07:24.320 happening with the biggest technology names. 0:07:25.560 --> 0:07:25.800 Sure. 0:07:25.840 --> 0:07:29.600 Hello, Clearly volatility didn't take the summer off. We saw 0:07:29.720 --> 0:07:33.480 the markets were led by the Magnificent seven and on 0:07:33.600 --> 0:07:36.560 the way lower, it's been the Magnificent seven that have 0:07:36.920 --> 0:07:40.640 been really the weak spot. I think the issue has 0:07:40.680 --> 0:07:46.280 been that of expectations. These companies continue to deliver outsize 0:07:46.360 --> 0:07:50.000 earnings growth, but the bar was very high heading into 0:07:50.000 --> 0:07:54.440 this quorder, and as a result we did see some disappointments. 0:07:55.320 --> 0:07:57.880 These were the names that have been trading at the 0:07:57.960 --> 0:08:02.520 highest pe ratios. So as we talking about the yen charactery, 0:08:02.920 --> 0:08:06.160 heads funds, many heads fans borrowing in yen to invest 0:08:06.200 --> 0:08:09.360 in other assets, and now with the yen appreciation, they're 0:08:09.400 --> 0:08:12.080 selling some of those assets, and no doubt some of 0:08:12.080 --> 0:08:15.120 these are the Magnificent seven stocks. So we have a 0:08:15.120 --> 0:08:20.560 combination of high bar, we have earnings broadening to other sectors. 0:08:20.560 --> 0:08:24.160 For example, this earning season, we have seen the biggest 0:08:24.160 --> 0:08:27.680 earning surprises coming from defensive sectors and also some of 0:08:27.680 --> 0:08:30.320 the cyclical ones and not the growth sectors that we 0:08:30.400 --> 0:08:33.240 have been used to over the last couple of earning seasons. 0:08:34.400 --> 0:08:36.959 But at the same time, the fundamentals have not seen 0:08:37.040 --> 0:08:39.320 so let exactly, so let me jump in. 0:08:39.360 --> 0:08:41.720 The fundamentals have not changed, is what you just said. 0:08:42.080 --> 0:08:44.400 We made a big deal of the gain in the 0:08:44.480 --> 0:08:46.200 S and P five hundred in the first half of 0:08:46.240 --> 0:08:49.800 this year, fourteen percent or so, largely coming from the 0:08:49.800 --> 0:08:52.640 Magnificent seven and in years where the S and P 0:08:52.760 --> 0:08:55.120 five hundred is gained double digits in one AH, it 0:08:55.240 --> 0:08:57.760 usually goes on to perform in two AH. How much 0:08:57.760 --> 0:09:01.920 of the departure is this session for that historic trend. 0:09:03.000 --> 0:09:06.760 Not that this is an abrupt and uncomfortable pullback. And 0:09:06.800 --> 0:09:09.880 I think there's two things going on. One is the 0:09:09.920 --> 0:09:13.600 technical picture, which if it is an over reaction that 0:09:13.640 --> 0:09:16.640 potentially move lower presents an opportunity for the remainder of 0:09:16.640 --> 0:09:18.520 the year. And then the second part we need to 0:09:18.559 --> 0:09:22.640 answer as investors is is there something fundamentally broken? 0:09:23.080 --> 0:09:25.000 Meaning are we heading towards the recession? 0:09:25.040 --> 0:09:27.199 Because part of a lot of that narrative has been 0:09:27.240 --> 0:09:31.400 around the growth scare, and I think for our clients' perspective, 0:09:31.440 --> 0:09:34.880 we need to first answer the latter. The US economy 0:09:34.880 --> 0:09:37.720 still continues to grow, let's call it trend or maybe 0:09:37.720 --> 0:09:40.800 slightly below trend. Looking at the GDP now estimate for 0:09:40.960 --> 0:09:44.240 Q three is still slightly north of two percent. We 0:09:44.440 --> 0:09:49.480 just got the ism services PMI that was well into 0:09:49.600 --> 0:09:54.800 expansion territory, and the em employment component very importantly provided 0:09:54.880 --> 0:09:59.000 some reason for optimism given the Friday jobs report that 0:09:59.080 --> 0:10:03.319 we get. We do not think that the US economy 0:10:03.520 --> 0:10:06.680 in a week's time is going to fall off bed 0:10:07.320 --> 0:10:13.160 We have seen still rising earnings, corporate profits, consumers, and 0:10:13.320 --> 0:10:16.960 corporate balances remain healthy. So I think it fits into 0:10:17.000 --> 0:10:20.840 the narrative of broadening in market leadership away necessarily from 0:10:20.920 --> 0:10:23.560 the overall potentially over extended peck. 0:10:24.400 --> 0:10:27.320 So we are still posed for the remainder of the year. 0:10:27.520 --> 0:10:30.760 But we don't think that the Magnificent seven are going 0:10:30.800 --> 0:10:34.600 to be once again the ones that everybody gravitates towards. 0:10:34.800 --> 0:10:35.160 Angelo. 0:10:35.559 --> 0:10:37.960 Chief of what among what you've just outlined is in video, 0:10:38.400 --> 0:10:40.439 we are way off session loads and video is down 0:10:40.520 --> 0:10:43.000 six percent, but one point in the session was down 0:10:43.120 --> 0:10:46.240 fifteen percent, which for a company that size is a 0:10:46.280 --> 0:10:51.360 big drop. There was a report from the Information that 0:10:51.480 --> 0:10:55.319 said Blackwell, the next generation AI accelerator with face delays 0:10:55.360 --> 0:10:56.319 due to a design issue. 0:10:56.360 --> 0:10:57.040 Over the weekend. 0:10:57.440 --> 0:10:59.840 In video got back to us and said that actually 0:11:00.920 --> 0:11:04.480 Hopper demand is strong, Blackwell sampling is started. They don't 0:11:04.480 --> 0:11:07.719 comment on rumors, et cetera. You just said that we'll 0:11:07.800 --> 0:11:10.960 move away from sort of the concentration of leadership, but 0:11:11.040 --> 0:11:13.040 we have to wait until the twenty eighth for this 0:11:13.160 --> 0:11:16.959 month to get in video earnings. That's quite a long 0:11:17.000 --> 0:11:19.000 period of time in which the markets could have some 0:11:19.080 --> 0:11:22.040 anxiety for what has been a leader in the direction 0:11:22.120 --> 0:11:22.520 of travel. 0:11:22.520 --> 0:11:23.200 What do you make of that? 0:11:24.760 --> 0:11:27.480 Yeah, the Nvida is the last of Magnificent seven to 0:11:27.480 --> 0:11:29.960 report earnings, and no doubt, it's not that everybody the 0:11:29.960 --> 0:11:34.040 whole world is watching the theme so far with everybody's 0:11:34.080 --> 0:11:36.800 excited about the artificial intelligence, but there has been some 0:11:36.960 --> 0:11:40.400 skepticism over the last couple of weeks and investors are 0:11:40.440 --> 0:11:44.920 getting increasingly impatient to see the heavy spending of AI 0:11:45.080 --> 0:11:48.840 translate into eternal profits. But what we have been hearing 0:11:49.040 --> 0:11:52.560 from the remainder Magnificent six of the seven that they 0:11:52.600 --> 0:11:55.200 have been spending, so that should continue to be a 0:11:55.320 --> 0:11:59.920 pail wind for Nvidia. And I think what we're all 0:12:00.120 --> 0:12:03.200 been with here is again the high bar of expectations 0:12:03.360 --> 0:12:05.040 when you have a stock that's been up so much 0:12:05.040 --> 0:12:06.959 over the last couple of years and so this year, 0:12:07.000 --> 0:12:12.440 even with the recent pullback, Naturally that creates tension points 0:12:12.600 --> 0:12:15.640 whenever news like we have been getting over the last 0:12:15.679 --> 0:12:18.440 couple of weeks emergence. But at the same time, again 0:12:18.480 --> 0:12:22.080 we still continue to be positive around artificial intelligence, not 0:12:22.160 --> 0:12:24.400 only for this year, but for the next five to 0:12:24.480 --> 0:12:25.319 ten years. 0:12:25.600 --> 0:12:28.439 And I think that that is important for investors to remember. 0:12:29.679 --> 0:12:33.680 Angel Local Cafe senior strategist Edward Jones, thank you. We 0:12:33.840 --> 0:12:36.880 said that this all started in the Asian session. The 0:12:36.960 --> 0:12:41.080 taie X saw its worst day in fifty seven years 0:12:41.320 --> 0:12:45.199 after TSMC shares plunged nine point eight percent, a record 0:12:45.320 --> 0:12:49.040 daily decline for the AI chip maker. TISMC accounts for 0:12:49.120 --> 0:12:51.840 more than thirty percent of the taie X, which closed 0:12:52.320 --> 0:12:54.880 down eight point four percent. It's worth sell off since 0:12:54.960 --> 0:12:58.480 nineteen sixty seven in the seas In Japan and South 0:12:58.559 --> 0:13:03.880 Korea also significantly in their Monday sessions. Coming up here 0:13:03.920 --> 0:13:06.040 on Bloomberg Technology, we're going to hone in on Apple 0:13:06.160 --> 0:13:10.440 as shares plunge and Berkshire slashes its steak in the 0:13:10.480 --> 0:13:13.720 iPhone maker. The stock down three point three percent, again 0:13:14.040 --> 0:13:16.680 of session lows, but a significant decline. 0:13:16.800 --> 0:13:18.000 This is Bloomberg Technology. 0:13:27.080 --> 0:13:29.000 I believe it to buy an opportunity for the high 0:13:29.120 --> 0:13:32.080 quality of large cab memes that we like. 0:13:32.160 --> 0:13:34.560 To buy in these types of periods. 0:13:36.920 --> 0:13:39.359 Dan I was of Webbush earlier saying it's an opportunity 0:13:39.440 --> 0:13:41.440 to buy the dip in big tech. I know he's 0:13:41.480 --> 0:13:43.880 not alone in calling for that this morning. Let's also 0:13:43.920 --> 0:13:45.680 take a look at shares of Apple. We are way 0:13:45.720 --> 0:13:48.400 off session lows, but at one point in the session 0:13:48.440 --> 0:13:52.079 we're down more than ten percent, which was a worrying 0:13:52.120 --> 0:13:55.600 way to start the US session on a Monday. Let's 0:13:55.679 --> 0:13:58.960 bring in Bloomberg's Mark German. One of the catalysts or 0:13:59.000 --> 0:14:03.080 newsflow items of the weekend was Berkshire halfway slashing at 0:14:03.160 --> 0:14:06.720 steak in Apple, largely to generate cash. But there's his 0:14:06.760 --> 0:14:09.200 story on the Bloombag about how Apple investors have been 0:14:09.280 --> 0:14:13.000 urged to keep calm in spite of what happened elsewhere. 0:14:13.040 --> 0:14:15.960 We just concerned about growth the Apple side of this story. 0:14:15.960 --> 0:14:19.480 Please, when you have declines. 0:14:19.000 --> 0:14:22.640 Of this magnitude, you mentioned the ten percent decline in 0:14:22.680 --> 0:14:25.040 the early hours of trading. Now it sounds to about 0:14:25.040 --> 0:14:29.280 a three percent decline. These are more macro related issues 0:14:29.320 --> 0:14:32.800 when you have those big swings in that volatility. Right, 0:14:33.080 --> 0:14:37.120 There's nothing that Apple necessarily did. There's no news item 0:14:37.200 --> 0:14:41.680 related to Apple's actions a product its earnings. 0:14:41.240 --> 0:14:43.320 From last week. A lot of this has to do 0:14:43.400 --> 0:14:44.160 with macro. 0:14:44.000 --> 0:14:47.200 Concerns, the situation currently going on in the Middle East, 0:14:47.480 --> 0:14:51.120 the uncertainty surrounding the election, people wanting to hold onto 0:14:51.160 --> 0:14:53.200 their cash. But of course, as you mentioned the Warren 0:14:53.240 --> 0:14:57.600 Buffett Berkshire Hathaway news from over the weekend compared to 0:14:57.720 --> 0:15:01.160 the beginning of twenty twenty four, as steak in Apple 0:15:01.360 --> 0:15:02.320 is now half. 0:15:02.200 --> 0:15:02.960 Of what it was. 0:15:03.320 --> 0:15:06.600 He still hasn't about an eighty four point two billion 0:15:06.640 --> 0:15:09.520 dollar steak, So a huge steak remaining in Apple. But 0:15:09.560 --> 0:15:13.040 when you get those headlines about Warren Buffett right telling 0:15:13.120 --> 0:15:15.720 that much Apple over the course of the last six 0:15:15.760 --> 0:15:19.280 to eight months, that could be concerning combined with some 0:15:19.320 --> 0:15:24.760 of the other concerns greater China, artificial intelligence growth, the 0:15:24.800 --> 0:15:29.080 performance of the iPhone moving forward, their guidance certainly all 0:15:29.080 --> 0:15:31.320 of that combined in addition to the macro factors. 0:15:32.720 --> 0:15:35.680 Bloomberg News reflected going into Apple's earnings that some of 0:15:35.720 --> 0:15:38.080 the run up in the stock over recent weeks and 0:15:38.160 --> 0:15:42.120 months had been really about faith that Apple Intelligence would deliver. 0:15:42.280 --> 0:15:45.880 You've written over the weekend after earnings that actually, with 0:15:46.000 --> 0:15:48.080 Apple Intelligence, there's a long way to go. 0:15:48.480 --> 0:15:51.120 What were your arguments, Yeah. 0:15:50.920 --> 0:15:54.640 Apple Intelligence obviously is going to be a big initiative 0:15:54.640 --> 0:15:55.720 for Apple moving forward. 0:15:55.800 --> 0:15:58.680 They're marketing this heavily on the earnings call. 0:15:58.760 --> 0:16:01.320 I didn't get an official count, but I'm sure Tim 0:16:01.320 --> 0:16:04.240 Cook mentioned it at least fifteen to twenty times. Nearly 0:16:04.280 --> 0:16:06.600 every analyst asked about it. That has been a big 0:16:06.640 --> 0:16:09.760 catalyst for stock growth. But I don't think the initial 0:16:09.760 --> 0:16:12.280 feature set or even the future set in totality is 0:16:12.320 --> 0:16:15.360 something that's going to drive iPhone upgrades for this cycle. 0:16:15.560 --> 0:16:18.000 I think it's something that's probably going to drive upgrades 0:16:18.320 --> 0:16:20.600 in future cycles. Now, I want to be clear, I 0:16:20.640 --> 0:16:24.440 don't think there's a connection between realizations about the performance 0:16:24.440 --> 0:16:27.920 of artificial intelligence and this Apple stock decline. If you 0:16:27.960 --> 0:16:29.960 look at the rest of the market, they're in decline 0:16:30.000 --> 0:16:32.520 as well, So I think it's largely about more macro 0:16:32.640 --> 0:16:34.800 factors than anything very specific. 0:16:34.800 --> 0:16:39.040 In particular Bloomberg's Mark German on All Things Apple, Thank you. 0:16:47.160 --> 0:16:48.720 Time for talking tech and first Up. 0:16:48.800 --> 0:16:52.480 TikTok is being sued by the US government for allegedly 0:16:52.520 --> 0:16:55.880 collecting data on children. In a suit filed on Friday, 0:16:56.080 --> 0:16:58.840 the Justice Department claims the app has allowed millions of 0:16:58.920 --> 0:17:02.600 kids under the age of thirteen to create accounts without 0:17:02.640 --> 0:17:06.159 their parents' knowledge or consent in violation of an online 0:17:06.200 --> 0:17:10.080 Privacy Act. TikTok previously reached a settlement in twenty nineteen 0:17:10.400 --> 0:17:14.320 with the FTC on concerns related to child privacy. 0:17:14.359 --> 0:17:14.719 Plus. 0:17:14.920 --> 0:17:18.240 Online trading platforms from robin Hood to Fidelity and Charles 0:17:18.320 --> 0:17:22.080 Schwab have been suffering outages amid a surge in volume 0:17:22.280 --> 0:17:25.480 during this market sell off. More than fourteen thousand users 0:17:25.720 --> 0:17:28.960 reported an outage at Schwab at nine to fifty am 0:17:29.000 --> 0:17:31.440 in New York. That's according to the website down Detector. 0:17:31.760 --> 0:17:34.439 The firm did not immediately respond to requests for comment, 0:17:34.600 --> 0:17:37.399 but a company account posted on the social site x 0:17:37.640 --> 0:17:42.280 that some clients may have difficulty logging to Schwab platforms 0:17:42.480 --> 0:17:44.760 and shares of in Video falling today amid the tech 0:17:44.800 --> 0:17:47.800 sell off. According to reports, the company's upcoming AI chips 0:17:47.840 --> 0:17:51.040 will be delayed by three months or more due to 0:17:51.080 --> 0:17:54.320 a design flow and in Video spokesperson responded to Bloomberg 0:17:54.359 --> 0:17:57.479 over the weekend, saying, as we stated before, Hopper demand 0:17:57.560 --> 0:18:01.879 is very strong. Broad Blackwell's sum has started and productions 0:18:01.920 --> 0:18:04.359 on track to ramp in two h Beyond that, we 0:18:04.440 --> 0:18:07.600 don't comment on rumors all right more on AI. Groc 0:18:08.000 --> 0:18:10.399 has raised six hundred and forty million dollars in a 0:18:10.440 --> 0:18:14.520 Series D funding round, bringing evaluation to two point eight 0:18:14.520 --> 0:18:18.920 billion dollars. The startup focuses on building fast AI inference 0:18:19.200 --> 0:18:23.679 technology to supply increasing demand delights, bringing Jonathan Ross, founder 0:18:23.920 --> 0:18:24.720 and CEO. 0:18:24.520 --> 0:18:25.680 Of GROCK for more. 0:18:25.920 --> 0:18:28.040 Just last week, we were speaking to Lisa sou the 0:18:28.200 --> 0:18:32.560 MDCO about the move from training to influence. It's a 0:18:32.600 --> 0:18:35.359 sizable chunk of change you managed to raise. I guess 0:18:35.400 --> 0:18:37.560 the best starting place what we use the cash for. 0:18:38.840 --> 0:18:40.359 So the first thing is that we're going to build 0:18:40.359 --> 0:18:43.400 out about one hundred and eight thousand of our LPU 0:18:43.480 --> 0:18:47.080 chips or language processing units. To put that in perspective, 0:18:47.400 --> 0:18:50.680 you mentioned Hopper the Nvidia GPU. Last year they shipped 0:18:50.680 --> 0:18:52.960 about five hundred thousand, so this would be about twenty 0:18:52.960 --> 0:18:57.080 percent of what they shipped last year. Secondly, we intend 0:18:57.119 --> 0:19:00.800 to hire significantly. We're building out a lot of features. 0:19:00.800 --> 0:19:03.439 We actually offer a token as a service business where 0:19:03.600 --> 0:19:05.960 people can just use our hardware without having to buy it. 0:19:07.240 --> 0:19:10.760 And then we are looking at some acquisitions going forward 0:19:10.760 --> 0:19:12.560 as well. 0:19:12.800 --> 0:19:17.720 Strategically, when did GROC sort of say okay, inference needs 0:19:17.720 --> 0:19:20.320 to be our focus and how is it helping you 0:19:20.359 --> 0:19:23.320 get sort of get ahead that There's lots been discussed 0:19:23.320 --> 0:19:26.760 on this program about the many startups and companies working 0:19:27.119 --> 0:19:29.840 on training large language models from many hundreds of billions 0:19:29.840 --> 0:19:34.160 of parameters to smaller models. You have a more narrow focus, Jonathan. 0:19:35.160 --> 0:19:35.360 Yeah. 0:19:35.400 --> 0:19:38.080 So Grok from the beginning is focused on inference. And 0:19:38.359 --> 0:19:41.400 the reason is training at this point is a well 0:19:41.440 --> 0:19:43.320 solved problem and we always knew that it would be 0:19:43.440 --> 0:19:46.560 my background. I actually started the Google TPU chip and 0:19:46.720 --> 0:19:49.720 we actually started with inference there because we're actually able 0:19:49.760 --> 0:19:51.520 to train the models, we just couldn't afford to put 0:19:51.560 --> 0:19:54.520 them in production. Typically, whatever you spend on training, you 0:19:54.520 --> 0:19:57.280 will continue to spend going forward, but you're going to 0:19:57.280 --> 0:19:59.920 spend ten to twenty times that much putting it into production. 0:20:00.480 --> 0:20:02.399 You spend money to make the models, you make your 0:20:02.400 --> 0:20:06.560 money with inference. It's also a scale game, and so 0:20:06.680 --> 0:20:08.240 we've been focused on this since day one. 0:20:09.840 --> 0:20:14.040 There's also sort of a relationship and talent conversation to 0:20:14.040 --> 0:20:16.840 be had. Yan lquern Over at Meta is going to 0:20:16.840 --> 0:20:20.080 be your new technical advisor, which was in the news 0:20:20.119 --> 0:20:20.680 as well. 0:20:20.760 --> 0:20:22.040 Why is that important to you? 0:20:23.119 --> 0:20:26.280 So, Yan lacun is a legendary in this industry. He 0:20:26.359 --> 0:20:28.400 won the Turing Award for being one of the three 0:20:28.440 --> 0:20:31.320 people who invented the algorithms that make modern AI work. 0:20:31.680 --> 0:20:35.560 And of course Yan Lacun is very centrally positioned in 0:20:35.640 --> 0:20:39.000 terms of AI. He's also pushing very heavily for open 0:20:39.040 --> 0:20:42.200 source models or open weights models, and this is something 0:20:42.200 --> 0:20:45.840 that's important for the industry. GROC actually wouldn't exist today 0:20:46.200 --> 0:20:48.639 if it wasn't for open source models. We'd actually built 0:20:48.640 --> 0:20:51.080 the world's best chips, but if we didn't also have 0:20:51.160 --> 0:20:52.959